THE EYES HAVE IT – Restaurant surcharges – A new surprise fee?

Those who have recently dined in Denver restaurants may have noticed an addition to their bill of a surcharge of anywhere from 10 to 20 percent. Those who have not noticed may want to look more closely at their bill next time before handing over their credit card.

As 9News recently reported, “Many businesses are struggling to come back from the pandemic, including restaurants whose owners worry about keeping staff and paying them a living wage. To combat that, Denver’s Jelly Cafe is adding a 20% service charge to each bill.”

I am not singling out this restaurant, but it just happens to be the subject of the news article. The restaurant owner justifies the surcharge as, “a way to attract new workers and keep the ones he has from leaving.”

I noticed this surcharge after having brunch with a friend in the Highlands. We asked the server to explain the additional charge and were told it was to make up the difference between front and back of the house workers. Meaning that a dishwasher may make the minimum wage while server could make twice that amount.

This surcharge should eliminate the tip, although diners are free to add a gratuity which may lead to a final charge a third more than expected based on the menu prices. When I asked our server why the restaurant didn’t simply raise their prices and pay their employees in a more fair and equitable manner, he offered me the phone number of the restaurant owner in Vermont and suggested I take up the matter with him.

The entire concept of tipping is antiquated. As Politico reported, “Tipping originated in feudal Europe and was imported back to the United States by American travelers eager to seem sophisticated.” And like everything else these days is now deemed racist, “The practice spread throughout the country after the Civil War as U.S. employers, largely in the hospitality sector, looked for ways to avoid paying formerly enslaved workers.”

In most other countries, there is no tipping. The price on the menu is what the customer pays, clear and transparent, without added surprise fees. If there is a disparity between what different restaurant workers are paid, that is the restaurant owner’s responsibility to rectify.

Restaurants are reluctant to raise their menu prices for fear of losing customers, but if all restaurants are affected similarly and do the same, the higher prices will be uniform. If restaurants want to compete on prices they certainly can, if their prices cover the ever-increasing costs of labor, food, and other supplies as reflected by our currently inflationary cycle.

In the meantime, everyone wants a tip. Buy a takeout cup of coffee or a muffin and there is always the option for leaving a tip. It reminds me a hotel bill where the room may cost $100 but the added taxes, fees, and surcharges boost the final cost by 50 percent or more.

The surcharge, not presented to the customer until the meal is finished and it’s time to settle the bill, is a deceitful surprise. Perhaps a diner may choose a different meal or restaurant if they had known that the bill would be 20 percent more than the menu price.

How about a simple solution? Charge the price on the menu, enough to pay employees equitably and cover the costs of doing business with whatever profit margin the restaurant owner desires. Diners will know up front the cost of their meals without having to face surprise surcharges and angst over how much to tip. It should not be this difficult.